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Why Don’t We Comparison Shop for Our Healthcare?

Why Don’t We Comparison Shop for Our Healthcare?

If you’re going to buy a car do you limit your shopping to just one car dealer? If you need gas do you drive past three inexpensive service stations because someone told you to fill up at a fourth, where the price is much higher? I don’t think so. But that’s, apparently, what a lot of us do when we need to “buy” healthcare services.

I know that I do that and it’s also the conclusion of a working paper that the National Bureau of Economic Research just published. In this study, written by healthcare, economic, and management experts at Harvard, Yale, and Columbia Universities, patients had the opportunity to use a price comparison tool to research the cost of a non-emergency MRI. Not surprisingly, fewer than 1 percent of those patients took advantage of that tool. The study also shows that a patient who needs to get that MRI will, on average, bypass six lower-priced providers on the route between their home and the location where they actually receive the scan. Had the lowest cost MRI provider on that route been selected, the study reports, the patients could have reduced their out-of-pocket costs by about 30 percent and saved their insurance company about 40 percent.

Why aren’t patients comparison shopping?

Why do we select a particular facility if we need a non-emergency test, such as an MRI? The answer is we usually don’t select it — our doctor does.

“Ultimately,” the study reports, “we find that [the] referring physician is the strongest determinant of the cost of the MRI scans patients receive.” It continues: “… As a result, we find that in order to attend a cheaper MRI provider and save money, patients need to be diverted from their physicians’ pre-established referral pathways.”

Is healthcare shoppable?

“Our evidence suggests that, at present, the answer is ‘no,’” authors Michael Chernew, Zack Cooper, Eugene Larsen-Hallock, and Fiona Scott Morton concluded. “Going forward, our findings suggest that because of the weight patients appear to place on the advice of their referring physicians, it is unlikely that a significant number of patients will use information from an app or from a pricing webpage, or to diverge from where their physicians typically send patients for imaging studies.”
I’d like to think that the conclusion by the study’s authors is a little too pessimistic. If patients realized they have the ability to comparison shop, and if doctors were proactive and told their patients that it’s OK to shop around to save some cash, I think more of us would do that.
Would you?

(By the way, if you need help paying out-of-pocket costs for an MRI, the Multiple Sclerosis Association of America recently expanded its MRI assistance program. Find the details in a column that I wrote back in June.)

[This post first appeared as my column on the Multiple Sclerosis News Today website].

Reader Comments

  1. I’m looking at your site more and more as a good tool to find the latest MS information. Thanks for your efforts.

    1. Thanks for your nice words and taking the time to comment. I hope the info that I’ve found is useful and/or interesting to me is the same for my readers. We’re all in this together.

      Ed

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